Your law firm is your business – Time to treat it as such
27 Jul 2023
We have spoken quite a bit in the past about the importance of practice management. How it’s not only crucial for your law firm (to run it as a business) but how practice management is fundamental. In fact, we believe that it’s foundational to the successful running of every practice.
So much so that LEAD offers a Practice Management Training Course for all legal practitioners to ensure that they are properly trained, prepared and armed with the requisite knowledge they need to officially “run a law firm”.
We have spoken – at great lengths – about topics such as marketing for your practice (getting your name out there) and about finances (like invoicing, the importance of automated billing software, as well as what to do with unpaid invoices). We have compared case management to project management and even covered the importance of staff management. We have also made a strong case for the proper investment in and use of technology in your practice. It is all relevant. And it is all necessary to ensure that your law firm is being properly managed.
And yet, we feel that there is still more to cover. More points to drive home.
Sure, we understand that you need to wear multiple hats, which can be a daunting task – especially if you’re just starting out. But the reality is, law firms are not just providing legal advice and legal services anymore. They also need to make a profit at the end of the day to stay afloat. Yes, to do that legal practitioners need to focus on budgets, on invoicing, on promoting their wares. Yes, law firms need to embrace technology.
But running a successful business takes a little more than just invoicing.
Truly running your law firm like a business
The legal market is changing. We have all witnessed its evolution (or revolution) in recent years.
This evolution has been driven by the expansion of in-house legal departments, globalisation (through mergers and outsourcing), technological advances, and the rise of alternative legal service providers (Michigan Business & Entrepreneurial Law Review).
There has been a marvelous change in how we are all doing things. How we manage practices. It’s extremely exciting – keeping everyone on their toes – law firms, legal departments, and legal tech companies alike.
And with the way the world is moving, the adage about teaching “old dog” new tricks, has been disproven. Because the legal profession has undoubtedly changed. It has undoubtedly learnt new tricks.
But with all this change have we stopped to really think about what makes a successful business tick? Have we considered all the options out there?
We think not. Here are some additional considerations –
Something we have mentioned in the past, but something we believe bears repeating.
Predictably, the advent of law-related technology and the ever increasing need to keep up both with tech trends but also with our tech savvy (and advanced) clientele creates an interesting conundrum of challenge vs opportunity for law firms. How one law firm reacts to the implementation of technology into their practice will determine how successful they will be in the years to come.
Legal professionals have had to become agile and flexible, following in the footsteps of the companies they serve. With fingers in many pies, most companies nowadays are quite flexible in the work they do, the businesses they invest in and the products they supply. And their legal advisors have had to become equally flexible. If only to keep up.
Being “flexible” has never been more relevant. Or necessary. And the same will therefore ring true for how a law firm is managed.
It’s an interesting and exciting time to be alive and to run any business, but especially a law firm. It will be interesting to see how both the business of law and the practice of law continue to evolve.
With that, we believe remaining flexible with whatever life throws at you, is key.
Be open to opportunity
Stemming from being flexible comes the need to remain open to opportunities.
Lawyers are professionals that provide legal services. We understand that. But, at the end of the day they also need to be business people. They need to wear more than one hat – often simultaneously.
“It’s one thing to have the training and experience to perform legal tasks at a sufficiently high level. It’s quite another to have clients willing to pay you for those services” (Robert Katzberg).
The point here is – sometimes the best laid plans don’t result in the outcome you had probably hoped. A lot of the time – in reality – you only achieve 40% of what you set out to achieve in a year. Those are still good odds. And something to work from in the years to come.
It’s prudent to approach situations sceptically – ensuring you conduct your own internal due diligences. But it’s often the people you have not met yet and the circumstances you cannot yet imagine, that provide the basis for your business.
So be open to new opportunities. Whilst always keeping your eyes wide open.
Sometimes it’s thinking creatively that gets your business over the line.
In fact in the article Legal Tech’s Predictions for Innovating for Good in 2023 they set out as follows –
“2022 saw major advances in innovating for good in the legal tech space. For example, e-discovery tools were used to fight human trafficking, while litigation finance was tokenised to increase access to justice. Legal tech providers also pivoted to focusing more on social justice and advancing legal tech education for underserved students.
Legal tech also played a major role in responding to the war in Ukraine, providing assistance to Ukrainian lawyers and citizens alike. We’re expecting to see the trend toward legal tech helping the greater good grow even stronger in 2023”.
And while you may not be in the legal tech space, the developments above should set your heart racing. In fact, the capabilities provided by legal tech should get you thinking about how innovative your law firm currently is.
This isn’t a shoot for the stars analogy, rather a reach for and grab the branch at the top of the tree analogy. You can’t implement every legal tech newcomer into your business.
But you can start thinking like a tech savvy business and make decisions based on how you can embrace tech, taking your law firm to the next level. There’s a lot you can now offer your clients outside of your average legal service (and yes, we do understand that legal services is already a lot).
In the article 10 Recurring Themes in the Business of Law and Legal Technology they posed the idea of having an employee in charge of innovation –
“So, who is charged with leading innovation in law firms? More than likely, that person isn’t a lawyer, but an allied legal professional. A landmark study commissioned by the State Bar of California supports this idea: the key to “productivity requires lawyers to work closely with professionals from other disciplines.” The study hints at the many changes still to come to the legal industry, which will almost certainly affect the future of innovation in the legal business”.
That should certainly give you something to think about – how can you innovate? How can you create additional “value add” for your clients? How can you stand-out? Who can you integrate with or collaborate with in order to provide out-the-box thinking to the provision of legal services. Remembering that with legal tech it’s not only a question of what but of how….
We love this quote by Vincent Brault (the Senior Vice President, Product & Innovation at Anaqua) because it not only describes the things you can do with legal tech (and innovation) but also the positive outcomes that can follow –
“We often talk about the financial value of technology for law firms, their clients and in-house departments, but the software these firms implement can have an equally impactful value to the work-life balance and mental health benefits of legal professionals. Much of legal professionals’ time is spent on administrative tasks that add more work to each day. Reducing those administrative tasks to allow attorneys to focus on strategic, non-administrative projects as the bulk of their work will allow attorneys to do the work they enjoy and give them time back for their personal lives at the end of the day.”
Treat everyone as a potential referral source
Yes, marketing your law firm is extremely important. But there is nothing quite like word of mouth. It’s truly worth its weight in gold.
As Robert Katzberg set out in the article Succeeding in the Business of Law: 5 Rules Every Lawyer Should Live By –
“Treat everyone, whether they be clients, other lawyers, opponents, or judges you appear before, as potential sources of business, because that is what they are. You never know in what future circumstance any person you are dealing with professionally today, will tomorrow be in a position to either refer a matter to you or keep you out of one”.
Just like remaining flexible, being open to opportunity and being innovative, treating those you come across as potential business leads ensures that you never miss out on potential future (possibly lucrative) business partnerships.
The above points may not be entirely new or particularly groundbreaking, but they do help you see your law firm a little differently.
As legal practitioners you are taught to remain professional, not to tout for business. Not to bring the legal profession into disrepute. But the natural effect of that is becoming over-cautious. Not seeing opportunity. Sticking to colouring inside the lines. Which is fair enough.
But what often happens, is some legal practitioners and some law firms don’t reach their full potential.
By embracing the above, you give yourself space, you become open to what is around you and in that “space” and openness you give yourself potential. The possibilities are endless.
We will be chatting about the business of law for a few more articles. Keep an eye out.
If you have any questions regarding the information we have set out above or if you have any queries relating to legal tech and how you can incorporate it into your practice, get-in-touch and let’s see how we can take your software solution from good to phenomenal. If you don’t have any software supporting your legal practice yet, it’s not a problem. We are here to help you from scratch too.
AJS – as always – has your back!
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